Projects & Operations

Overall Approvals

The lending operations of the Bank Group for projects and programs are conducted through three windows: The African Development Bank (the “Bank”), the African Development Fund (the “Fund”) and the Nigeria Trust Fund (NTF). In 2015, total approvals of Bank Group operations amounted to UA 6.33 billion as at end-December 2015, a 25.4 percent increase over the 2014 approvals.

Bank Group operations at end-December 2015 recorded an increase of 25.4 percent over the operations at year-end 2014. This is significant, compared with the 15.1 percent increase in Bank Group operations at end-2014 and 3.1 percent increase at end-2013 over the previous years’ operations. As in the previous years, and in line with the Ten-Year Strategy (TYS), approved by the Boards in April 2013, infrastructure operations, mainly in energy and transport, received the bulk of Bank Group’s resources.

In 2015, Bank Group operations were aligned with the TYS, which emphasizes infrastructure investments in key sectors such as transport, energy, water and sanitation, and communications, for the transformation of Africa’s economies.

Of total Bank Group loan and grant approvals (UA 5.24 billion), more than half (54.2 percent) or UA 2.84 billion was allocated to infrastructure projects, with transport (30.3 percent) and energy (16.1 percent) accounting for the largest share. This was followed by water and sanitation (6.2 percent), with the smallest share going to communications (1.6 percent).

The relatively large allocation to infrastructure demonstrates the importance the Bank Group attaches to addressing Africa’s infrastructure gap and its commitment to promote inclusive and sustainable growth and development.

Operations by sector

Bank Group Loan and Grant Approvals by Sector 2015

(UA 5.24 Billion)

%

Sector

Percentage (%)

Multisector

13.16

Finance

12.28

Transport

30.25

Communication

1.64

Energy

16.06

Water & Sanitation

6.24

Social

11.31

Agriculture

9.02

Industry

0.06

Allocation to multi-sector operations, including public finance management and other governance-related operations represented 13.2 percent of total loan and grant approvals. These approvals strengthen governments' fiscal control, transparency and accountable use of public resources, modernize the taxation system and enhance revenue collection, strengthen domestic resource mobilization and facilitate restoration of public service delivery.

The finance sector operations were next with allocation of 12.3 percent of the total loan and grant approvals. These loans are mainly in the form of lines of credit (LOCs), guarantees and trade finance targeted at alleviating credit constraints faced by businesses on the continent especially micro, small- and medium-size enterprises (MSMEs). The MSMEs account for more than 45 percent of employment and 33 percent of GDP in Africa. The Bank's participation through lines of credit therefore serves as guarantor for MSMEs to access financing from financial institutions.

The chart also shows that the social sector received 11.3 percent of total approvals for interventions in skills development, technological innovation and improving education and health sector infrastructure. Africa's structural transformation has been held back by human capital, especially a shortage of skills. This is one of the factors investors have highlighted as a major constraint to doing business on the continent. By financing initiatives for skills development, the AfDB's determination is to remove the bottlenecks that hamper Africa's move to a higher growth trajectory.

For the ADB window, total approvals amounted to UA 4.52 billion, 41.1 percent higher than for 2014. Both the ADB private and public sector operations contributed to this performance, but the increase in the public sector of this window was more significant. While operations financed through the ADB private sector window increased marginally by 0.9 percent in 2015 relative to 2014, operations at the ADB public sector window in 2015 increased by a robust 78.3 percent compared with 2014

Operations by Sub-region

Bank Group Loan and Grant Approvals by Sector 2015

(UA 3.56 Billion)

For the Central Africa region as a whole, loans and grants amounted to UA 150.0 million, with 50.1 percent allocated to multi-sector operations, 19.8 percent committed to the communications sector, 12.3 percent to the energy sector, 9.7 percent to social sector operations, while agriculture operations accounted for 8.1 percent.

Total financing approvals for East Africa amounted to UA 1.06 billion, which was about 70.2 percent more than the amount approved in 2014. Infrastructure financing in transport, water and sanitation, and energy accounted for the largest share (64.8 percent) of total approvals. An additional 27.1 percent was allocated to the social sector to support technical and vocational skills development, employment, drought and other emergency relief operations. The remaining 8.1 percent was allocated to the finance sector in the form of lines of credit to MSMEs, agriculture, and multi-sector operations.

Bank Group operations increased by 243 percent to UA 1.04 billion million from UA 304.2 million in 2014. Of this amount, 43.1 percent was allocated to multisector operations for public finance management and governance-related operations, followed by 29.1 percent which went to infrastructure, mainly transport and energy, while social sector operations in regional development and job creation interventions accounted for 13.9 percent. Approvals to agriculture took a 13 percent share of approvals while other smaller shares went to finance and industry sectors.

In 2015, Bank Group approvals for the region increased by 8.5 percent to UA 1.26 billion from the approvals made in 2014. The finance sector was the largest recipient, accounting for 39.5 percent of total approvals. Supported operations were mainly in the form of lines of credit and trade finance in support of MSMEs. Approvals for financing infrastructure operations (energy, transport and water and sanitation) accounted for 45.0 percent and the remaining 15.5 percent was allocated to the social, agriculture, industry and multisector interventions.

In 2015, total approvals for the West Africa region amounted to UA 660 million, an amount that is 47 percent lower than in 2014. The year 2014 was exceptional as the approvals included some large private sector and multinational public sector operations. For the 2015 approvals, infrastructure operations took up more than a third (46.1 percent) of the allocation, channeled to transport, energy and ITC projects. Agriculture was allocated 27.5 percent of the funds for the soft commodity and trade finance operations while 16.5 percent went to multi-sector operations. Lines of credit to MSMEs and support to the social sector accounted for 7.6 percent and 2.3 percent, respectively.